I participated in the ’04 tradesports presidential election market. I bet on Bush to hedge against a Kerry loss.

What was fascinating was how the implied probability of a Bush win, which had been sitting at about 60% essentially since the contract had been opened, plummetted only about 30% as the results were coming in — then suddenly switched back and headed towards 100% in the final minutes!

Maybe the market knew something the rest of the world still hasn’t figured out.

Anyway, it’s a shame these criminals have made it illegal now. They might as well make investing illegal.

It should be noted that the volume on some of these races is very, very low (fewer than a 100 total trades/purchases for some races), so in that respect it might not be as accurate as it would be for the the high volume races where lots of people are paying close attention to what is going on politically.